Bill Ackman, Pershing Square Capital Management, weighs in on the Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Allergan, Inc. (NYSE:AGN) controversy and long-term shareholder activism.
In his first-quarter letter to investors of Greenlight Capital, David Einhorn lashed out at regulators. He claimed that the market is "fractured and possibly in the process of breaking completely." Q1 2021 hedge fund letters, conferences and more Einhorn claimed that many market participants and policymakers have effectively succeeded in "defunding the regulators." He pointed Read More
Ackman: Allergan, Valeant merger economically right thing to do
mario bobelli, very well-known investor was on squawk box and said the following. what ackman did is a tactic that needs more exposure so that it doesn’t happen again. it’s not fair. people say it was legal front-running for illegal insider trading. who is being helped and who, if anyone, is being harmed? everyone we make as a shareholder activist we have a plan so canadian pacific, we had hunter harrison in our pocket, agreed to come in and be the next ceo of our company. bought 14% of the company from people we don’t know we had harrison and disclosed our stake in the 13d and announced he was our candidate and the stock went 60 to $173 a share, didn’t go overnight but it got there over time and the person who sold to us between 46 and 60, yes, perhaps they would have wanted to though we had hunter harrison in our pocket but if an activist shareholder can’t build a stake in advance of advancing their plan there won’t be any shareholder activism. allergen in particular, let’s look at the shareholder. only bought 9.7% of the stock so93.7% of the shareholders got100% of the valuation for usworking with valiant to put in aproposal for the company.the stock was 116.63, today it’s168.i have to believe theshareholders are very happy andgot a lot of calls fromshareholders who are very happy. i’m sure the shareholders arehappy and anybody who has beenin the stock is happy. the stock we bought between0% and 9% of the company, wepushed the market price up overthat period of time so a bunchof shorter term investors got abetter price than they would hadhad we not been involved.valiant had tried to acquire thecompany over the previous 18months.by partnering with us weincreased the chance of a mergerhappening that otherwisewouldn’t happen.unfortunately, a lot of examplesof mergers in corporate americathat don’t happen because ofsocial issues and this is a casewhere economically this is theright thing to do, a much bettercompany, a much stronger companythat will, you know, be morecompetitive globally as a resultof this merger transaction andwe catalyze that to happen.we did that well within theconfines of the rules.the rules say, look, in somesense almost every investment wemake we are trading on our ownmaterial nonpublic informationwhich is our strategy for whatwe intend to do, and that’s whystock prices tend to rise theday after we take our stake. sure. we had to tell the market inadvance what we were going todo, the stock price would moveup and we’d never get anopportunity to get paid for ourown idea. i would just suggest what wehere and what the critics wouldsay is that, yes, but what islegal and what’s okay by therules doesn’t necessarily meanit’s right, and the rules somepeople are lobbying to changedirectly because of thistransaction. my question is who is harmed,right?every shareholder in allergengot a higher price, 93% got amuch higher price and thebenefit of a transaction thatnever would have happened.i don’t know that anyone wouldhave been harmed. maybe it’s just that you gotit too good. if everyone wants us to dopoorly in order for everyoneelse to do good is not a goodenvironment.i think long-term shareholderactivists is a very goodstrategy.it helps the big institutionswho are required to be passive.we’re not successful unless themajority of other hair holdersagree with what we have in mindand the reason for valuecreation in allergen is with ourpartnership with valiant we wereable to catalyze a transactionthat otherwise wouldn’t happen. do you think the law will be
Ackman: No alternative to Fannie and Freddie
CNBC’s Scott Wapner speaks to Bill Ackman, Pershing Square Capital Management, about the “winding down” of the old version of Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) and discusses the importance of reform to their programs.